John Wiley Sons Cl ((WLY)) has held its Q1 earnings call. Read on for the main highlights of the call.
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John Wiley Sons Cl’s recent earnings call presented a balanced outlook, with notable achievements in AI licensing revenue and strategic partnerships, countered by challenges in the professional publishing market and a decline in learning revenue. The company remains committed to shareholder returns, yet faces temporary increases in corporate expenses, resulting in a neutral overall sentiment.
AI Licensing Revenue Growth
John Wiley Sons Cl reported a significant increase in AI licensing revenue, reaching $29 million this quarter, compared to $17 million in the same period last year. This growth underscores the company’s successful expansion in the AI sector, highlighting its strategic focus on technology-driven revenue streams.
Strategic Partnership with Anthropic
The company announced a strategic partnership with Anthropic, aiming to integrate institutional library subscriptions into Claude, a move that enhances AI capabilities in scholarly research. This partnership is expected to bolster Wiley’s position in the academic and research sectors.
Dividend and Share Repurchase Program
Wiley continues to demonstrate its commitment to shareholder returns by increasing its annual dividend for the thirty-second consecutive year. Additionally, the company approved a $250 million share repurchase authorization, marking a 25% increase over the previous program.
Record Month for Open Access Submissions
July marked a record month for open access submissions, reflecting strong momentum in this area. This achievement is indicative of Wiley’s growing influence and success in the open access publishing market.
Strong Financial Position and Cash Flow
The company reported an improvement in free cash flow, with a use of $100 million compared to $107 million last year. Furthermore, the net debt to EBITDA ratio improved to 1.9, showcasing Wiley’s robust financial health.
Professional Publishing Market Softness
Wiley faced market headwinds in the professional publishing sector, experiencing a decline in retail channel performance and consumer spending. This softness poses challenges for the company’s traditional publishing business.
Decline in Learning Revenue
Learning revenue saw an 8% decline this quarter, attributed to lower AI and market-related softness in professional publishing. This decrease highlights the challenges Wiley faces in maintaining growth in its learning segment.
Journal Renewal Comp Impact
The company lapped a $5 million journal renewal benefit from Q1 last year, impacting research publishing revenue. This comparison effect underscores the volatility in the research publishing market.
Temporary Increase in Corporate Expenses
Wiley experienced a temporary $4 million increase in corporate expenses due to strategic consulting projects and other one-time items. These expenses are expected to be non-recurring, allowing for future cost stabilization.
Forward-Looking Guidance
Looking ahead, Wiley provided guidance that reflects confidence in its fiscal 2026 commitments. The company anticipates mid-single-digit growth in research, driven by AI licensing and open access momentum. Despite a slight decline in research publishing revenue, submissions and output are on the rise. Wiley expects revenue growth in the low to mid-single digits, with adjusted EPS of $3.90 to $4.35 and free cash flow of approximately $200 million.
In conclusion, John Wiley Sons Cl’s earnings call highlighted a mix of positive growth in AI and strategic partnerships, alongside challenges in traditional publishing markets. While the company faces some headwinds, its strong financial position and commitment to shareholder returns provide a solid foundation for future growth.